Monday, March 16, 2015

031315 MSWeekly - TechniTrader Flow of Funds TTFF Indicator

TechniTrader Flow of Funds TTFF Indicator
Institutions Buying Or Selling Stock
The TechniTrader® Flow of Funds TTFF indicator was designed to help retail traders and individual investors see when Funds are moving into or out of a stock. There are currently over 12,000 Funds trading stocks and many have billions of dollars to place. Their presence in the market is dominant with over 80% of all order activity being some sort of Fund buying or selling.
Therefore if a retail trader or individual investor simply watches MACD, Bollinger Bands, Stochastic or another other price indicator, they are missing a huge portion of analysis needed in order to be consistently successful. Systems and strategies alone will not give consistent results.
TT Flow of Funds indicator tracks Institutional activity and can help reveal tops and bottoms earlier, as well as anomalies that warn of a sudden change of trend.
In the chart example below the TT Flow of Funds indicator is the blue line in the bottom chart window. The red line is a subordinate indicator that helps make the TT Flow of Funds indicator easier to read.
C:\Documents and Settings\User\Desktop\012913 MS Weekly 2.png
First of all TT Flow of Funds should be trending upward, with steady relatively consistent upward action as price moves up.
Secondly keeping an eye on the subordinate indicator which is a linear regression indicator, we can watch for crossover patterns. During sideways patterns the TT Flow of Funds will oscillate, but during trending patterns it will step upward as the stock moves up. When Flow of Funds ebbs or wanes, it will be flat with the subordinate indicator hovering tightly.
As it moves up, a sharp Stairstep Pattern emerges, which is the signal that a heavy Flow of Funds occurred as we see in this chart. This was confirmed with Reuter Lippor Reports the following month that indeed, Mutual Funds had a huge influx of money by small investors.
Two areas to watch closely for in using TT Flow of Funds are the extreme high range and extreme low range. These areas are early topping and bottoming warnings. Below is a chart example after a topping pattern formed in TT Flow of Funds.
C:\Documents and Settings\User\Desktop\012913 MS Weekly TTFF edited .png
The green arrow on the right shows the peaking action of TT Flow of Funds indicating this was a top, before the top confirmed. The V line on TT Flow of Funds as indicated by the green arrow on the left, shows a bottoming or strong support level for the stock.
TechniTrader Flow of Funds TTFF is one of the TechniTrader® proprietary indicators created exclusively for MetaStock® Charting Software Users. It tracks institutional activity, and warns of a sudden change of trend. It reveals when a huge influx of money occurs, and provides early warning for tops and bottoms.
Trade Wisely,
Martha Stokes CMT

Instructor & Developer of TechniTrader Stock and Option Courses
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Disclaimer: All statements are the opinions of TechniTrader, its instructors and/or employees, and are not to be construed as anything more than an opinion. TechniTrader is not a broker or an investment advisor; it is strictly an educational service. There is risk in trading financial assets and derivatives. Due diligence is required for any investment. It should not be assumed that the methods or techniques presented cannot result in losses. Examples presented are for educational purposes only.

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